Now Norweb pulls out of retailing

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The Independent Online
NIGEL COPE

The decision by United Utilities to sell Norweb's electrical retail interests makes it the latest in a long list of the privatised utilities to abandon the cut- throat market.

Eight electricity companies have now pulled the plug on their electrical stores in the last 12 months, as pressure to deliver value for shareholders forces tough decisions on peripheral activities. The Rumbelows chain also closed a year ago blaming mounting losses for the decision.

Only a handful of the regional electricity companies, including Seeboard, Northern and Scottish Hydro are still battling on. Only Scottish Power is still expanding aggressively. Most have been making substantial losses and have either sold or closed large parts of their operation.

Norweb's electrical division is unusual in that it was making profits - pounds 8m last year on sales of pounds 207m. It has 90 high street stores and 67 out of town superstores. Most are in the North West though it has 18 superstores in the South West after it's purchase last year of some of Swalec's outlets.

The most likely candidate to buy the stores is the company's management led by Peter McTague, the group's retail director. He joined Norweb in 1992 and was previously a board director at Comet.

The electrical retail sector is rapidly consolidating into a few major players led by Dixons (which also owns Currys) and Comet, part of the Kingfisher group.

A year ago East Midlands Electricity and Yorkshire sold their Homepower joint venture. South West and web Manweb gave up the fight in April. In May the Powerhouse chain, which was jointly owned by Eastern, Midland and Southern, was put on the market.

Following Eastern's takeover by Hanson, some 200 of the outlets were sold to the management and another 200 were closed.

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